Today Trends

Author: Björn Dressel, ANU Australia–Philippines relations received a significant boost during Australian Prime Minister Anthony Albanese’s visit to the Philippines in early September 2023 — marking the first visit by an Australian prime minister since 2003. Part of Albanese’s whirlwind tour of Asia, the visit culminated in the signing of a Strategic Partnership Agreement between the two nations. Both maritime countries have been bound by shared values, mutual cooperation and strategic interest in a regional rules-based framework. As Asia’s oldest democracy, the Philippines shares a tradition of upholding democratic values and rights with Australia. But human rights violations during the Philippines’ martial law period in 1972–1986 prompted consecutive Australian governments to bring up their concerns with former Philippine president Ferdinand Marcos Sr. Defence ties remained robust and have deepened in response to China’s rise, as exemplified by the 2012 Visiting Forces Agreemen

Author: Fukunari Kimura, Keio University and ERIA Japan and the European Union held their first ministerial-level council meeting on 3 July 2023 as part of a digital partnership announced last year. A joint statement published afterward reveals that the partnership is being built around four pillars, including semiconductors, rules on digital economy, submarine cables and cooperation on high-performance computing including 5G and beyond. Industrial policy on semiconductors and rules on digital economy stand out as particularly important facets of the burgeoning Japan–EU Digital Partnership. Semiconductors are now subject to industrial policy to attract advanced firms and encourage innovation. The Japan–EU joint statement cites a memorandum calling for in-depth cooperation on an early warning mechanism for the semiconductor supply chains, research and development for semiconductors, advanced skills for the semiconductor industry, use cases of semiconductor applications and subsidy

Author: Misha Monteiro-Benson, NUS For over a decade, Kazakhstan has been experiencing a ‘brain drain’ of skilled and educated workers in many key industries. This may be starting to change. Kazakhstan’s economic growth, propelled by oil and gas, has slowed in part due to fluctuations in global commodity prices. The government has attempted to diversify the economy to promote sustainable growth. But inadequate tertiary education has left a massive skills deficit, while many skilled workers have sought greener pastures abroad. Kazakh officials have attempted to stem the brain drain with policies like the Bolashak program, which provided scholarships to Kazakhs to acquire skills at foreign universities. The program had some success, but failed to fill gaps in key sectors like information technology. Some scholars also chose to not return to Kazakhstan for personal or professional reasons. Unexpectedly, Russia’s invasion of Ukraine has resulted in massive individual and corporate mi

Authors: Made Anthony Iswara, Dimitri Swasthika Nurshadrina and Asep Suryahadi, SMERU Research Institute The European Union’s newest deforestation regulation may spell trouble for smallholders in palm oil producing countries. Effective from 29 June 2023, the European Union has implemented the European Union Deforestation Regulation (EUDR), which is aimed at ensuring that products consumed by EU citizens do not contribute to global deforestation or forest degradation. While this may seem like a noble endeavour, a more cynical view might suggest that this is a veiled protectionist measure. The European Union may be attempting to benefit from trade advantages by setting barriers to entry for products from countries that cannot easily comply with the new regulation, such as palm oil from developing countries. This will make it easier for European producers of alternative goods, such as sunflower oil, to dominate the market — both domestically and internationally. The EUDR will hinder

Author: James Guild, RSIS For several years, Tesla and its CEO Elon Musk have flirted with entering the Indonesian market. The Indonesian government, under President Joko ‘Jokowi’ Widodo, has made overtures, with powerful actors like Coordinating Minister for Maritime Affairs and Investment Luhut Binsar Pandjaitan showing up at Tesla’s manufacturing plant in Texas in April 2022 to promote investment opportunities in Indonesia. On the sidelines of the 2022 G20 summit in Bali, Musk was interviewed by Anindya Bakrie, CEO of Bakrie and Brothers, and said he was ‘bullish’ on Indonesia. Despite these sentiments, Tesla has not made a big move in the country. This lack of progress probably stings a little bit more given that Tesla opened a sales office in Malaysia and will be opening a showroom in Thailand. Indonesia may be beginning to wonder if it is being passed over by Tesla and the reasons behind this decision. The first aspect to consider is Tesla’s objectives in Indonesia and I

Author: Masahiko Takeda, ANU In August 2021, the International Monetary Fund (IMF) increased its allocation of special drawing rights (SDRs) to member countries by 456 billion units, equivalent to about US$650 billion. This increase pushed the total SDRs to SDR 661 billion — close to US$1 trillion. SDRs function as a universally accepted international reserve asset that can be exchanged with hard currencies and used outside of the IMF for different purposes. Each member’s SDR holdings serve as a credit line that can be drawn down at their discretion. The cost of using these funds is a weighted average of short-term interest rates on the five SDR currencies — the US dollar, the euro, the yen, the British pound and, since 2015 , the Chinese yuan. In 2021, this cost was virtually zero. The SDR allocation in 2021 meant that all IMF members obtained increased access to cheap credit with no strings attached. Since SDRs are allocated proportionately to members’ ‘quotas’ — their capital

Author: Editorial Board, ANU Some have been predicting the collapse of the Chinese economy for decades. Could they finally be right?  China’s economic recovery coming out of the zero-COVID policies at the beginning of this year has stalled. The economy only grew at a seasonally adjusted rate of 0.8 per cent (quarter on quarter) in the second quarter, slower than many of the quarters when China was in COVID-induced lockdown.  The World Bank last week cut its forecast for Chinese economic growth in 2024 to 4.4 per cent, down from its earlier prediction of 4.8 per cent. That’s still a respectable growth rate for an economy the size of China’s, but will be the economy’s slowest growth rate since the 1960s.    The Chinese economy’s long COVID is due to weak consumption, production and investment, as well as strained balance sheets.   Structural and cyclical factors both now bedevil management of the Chinese economy. China’s population has peaked and is  rapidly getting old . While mu

Author: Yiping Huang, Peking University Lacklustre growth and rising uncertainty has focused the world’s attention on the state of China’s economy. After a strong start to 2023, Chinese economic activity has sharply fallen short of expectations. Exports have collapsed. Consumption, production and investment have slowed, while inflation levelled out and the unemployment rate edged up. The Chinese renminbi hit new lows in August and September 2023, driven by worries about the domestic economy. Former US treasury secretary Larry Summers has made ominous comparisons between China, Russia and Japan, saying that ‘people are going to look back at some of the economic forecasts about China in 2020 in the same way they looked back at economic forecasts for Russia that were made in 1960 or for Japan in 1990’. As always, there are cyclical and structural factors at play in the unfolding economic outlook. Among the cyclical factors are scars from the COVID-19 pandemic — deteriorating balance

Authors: Joseph Bouchard, Carleton University and Sophie Egar, Johns Hopkins University At the BRICS Summit in Johannesburg on 24 August 2023, the bloc’s five members — Brazil, Russia, India, China and South Africa — announced the invitation of six new countries — Argentina, Egypt, Ethiopia, Iran, Saudi Arabia and the United Arab Emirates. Effective 1 January 2024, BRICS countries will represent almost half the world’s population. While BRICS has struggled to make concrete achievements, the momentum may now be shifting. This expansion would have the BRICS overtake the G7 in total gross domestic product, with BRICS economies growing at higher demographic and economic rates than G7 members. The BRICS expansion could help reduce tensions among the BRICS’s Middle Eastern countries, but could also provoke the United States and NATO, given the admission of Iran and the current membership of Russia and China. A growing number of countries have expressed interest in joining the BRI